Although the popularity of cryptocurrencies is skyrocketing, crypto scams are rising at just as fast a rate. With this at stake, crypto investors should be aware of multiple cryptocurrency scams to avoid potential losses to their digital wallets.
Cryptocurrency Ponzi scams have managed to steal significant amounts of money. According to a report by CipherTrace, nearly 725 million dollars were stolen by cryptocurrency-related scams in 2018 alone.
Let’s explore how to be careful not to fall for the traps of cryptocurrency Ponzi schemes in 2022 and continue to profit.
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What is a Ponzi scheme in the world of cryptocurrencies?
It could be said that cryptocurrency Ponzi scamswork in 2 different ways:
One of them is the one intended for people who are already in the cryptocurrency market and demand payments in cryptoactives, taking advantage of the irreversibility of transactions so as not to return the money at any time. money they place with them.
The second type is the one that focuses on the public that doesn’t know much about this world. Scammers take advantage of the fact that this market is still relatively new and that many do not really know what they offer.
The most common scams with cryptocurrencies: how to protect yourself to avoid them
It seeks to hook people through high-yield investments in cryptocurrencies and since the user does not know about the market, they end up falling.
Regardless of the way they apply, the Ponzi scams that are seen in the cryptocurrency market they usually have their own elements that allow us to identify them:
- Return on investment regardless of how the market is, when its volatility is extreme.
- There is no way to use the profit within the market.
- There is no clarity about the people who carry the investment.
In January 2022 , a bitcoin Ponzi scheme made headlines in Brazil. The owner of the pyramid scam had a minimum of 7,000 million dollars between 2015 and 2021 with the promise of a 10% monthly return on the digital portfolios of crypto investors, all lies.
Although the market global cryptocurrency offers a lot of opportunities to make profits, beware of crypto traps. It is very easy to attract investors with the promise of a higher return on investment through imaginary companies.